30 
BULLETIN 102, UNITED STATES NATIONAL MUSEUM. 
ests of beauty must give place to pressing needs of utility. This 
consideration alone would not give rise to disfavor in regard to water- 
power development. The source of disapprobation lies in the lack 
of vivid appreciation as to the matter of need, coupled with the 
attendant imputation of surrender to vested interests. Accordingly 
the water-power situation can not be satisfactorily cleared up until 
the need for the systematic development of this resource is firmly 
established; until freight congestions, fireless homes, foodstuff costs, 
and other intimately personal issues are seen to be genuinely in- 
volved; until the opportunity for the restrictive furtherance of 
special interests, financial or sectional, has been eliminated. Until 
these conditions have been met, attempts to promote the development 
of our water-power resources are bound to result in ineffectual 
compromises. 
3. Cost . — A hydroelectric station, once established, is largely self- 
contained and automatic in operation. There are no periodic items 
of cost for fuel, for its freightage, haulage, handling, and the like, 
such as associate themselves with the operation of a steam-power 
plant. So, apart from such incidentals as administration, insurance, 
taxes, and depreciation, which together bulk small, practically the 
whole burden of gross operating expense is that assumed at the 
outset in the guise of initial cost and perpetuated in the form of 
interest money. 1 
Thus the cost of money, displaying itself in bond interest, is the 
determining factor in the cost of hydroelectric power precisely as the 
price of fuel, with its accompaniment of expense, determines the cost 
of steam power. The cost of money in this country, on a strictly 
commercial basis, is high. The prevailing rate of interest demanded 
of water-power developments is around 7 or 8 per cent, which, with 
discounts taken into consideration, normally means a demand 
amounting to 9 or 10 per cent on the working proposition. Esti- 
mate after estimate the country over has gone to show that only the 
i A unit analysis of the gross operating expenses of a typical steam-electric and hydroelectric station of 
the same capacity (20,000 horsepower; annual load factor, 50 per cent; coal, at $3.25 per ton delivered) is 
given as follows by Gano Dunn, The water-power situation including its financial aspects, Proc. Amer. 
Inst. Electr. Eng., May, 1916, p. 585: 
Steam station 
(per cent of 
total gross 
operating 
expenses). 
Hydroelectric 
station (per 
cent of total 
gross 
operating 
expenses). 
Administration 
Ordinary operating expenses (except coal) 
Coal 
Taxes and Insurance 
Depreciation 
Bond interest 
4.0 
10.6 
48.9 
6.7 
10.8 
19.0 
4.0 
4.8 
2.8 
11.0 
77.4 
100.0 
100.0 
Total 
